Constellium UK Limited - Limited company accounts 20.1

REGISTERED NUMBER: 00226185 (England and Wales)

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

FOR

CONSTELLIUM UK LIMITED

Page

Company Information

1

Report of the Directors

2

Report of the Independent Auditors

4

Income Statement

8

Other Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

DIRECTORS:

M R Jarrett

M J Tardy

SECRETARY:

Eacotts International Limited

REGISTERED OFFICE:

Grenville Court Britwell Road

Britwell Road

Burnham

Slough

Buckinghamshire

SL1 8DF

REGISTERED NUMBER:

00226185 (England and Wales)

AUDITORS:

Haines Watts, Statutory Auditor

Chartered Accountants

Advantage

87 Castle Street

Reading

Berkshire

RG1 7SN

The directors present their report with the financial statements of the Company for the year ended 31 December 2021.

PRINCIPAL ACTIVITY

The principal activity of the company is that of research and development of aluminium products and the hosting of employees.

FUTURE DEVELOPMENTS

The company continues to be funded by the group and will continue to bid for government funding on its research and development programs where available.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2021 to the date of this report.

M R Jarrett

M J Tardy

Other changes in directors holding office are as follows:

S M Meeuwissen-True ceased to be a director after 31 December 2021 but prior to the date of this report.

RESULTS AND DIVIDENDS

The loss for the year amounted to £97,907 (2020: a loss of £142,470). No dividend was proposed during the year (2020: £nil).

QUALIFYING THIRD PARTY INDEMNITY PROVISIONS

The company has entered into indemnity arrangements for the benefit of all of its directors in relation to certain losses and liabilities which they may incur to third parties in the course of acting as directors of the company and in compliance with the requirements of the Companies Act 2006. The insurance was in place for the full year ended 31 December 2021 and remains in place at the date of signing these financial statements.

GOING CONCERN

The company's ultimate parent undertaking has indicated that for at least twelve months from the date of approval of these financial statements, it will continue to make available such funds as are needed by the company to pay its liabilities as they fall due and in particular will not seek repayment of the amounts currently made available.

The directors consider that this should enable the company to continue in operational existence for the foreseeable future by meeting its liabilities as they fall due for payment. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.

Based on the undertakings from the parent company the directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

AUDITORS

The auditors, Haines Watts, Statutory Auditor, have been appointed during the current year

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

M R Jarrett - Director

27 September 2022

Opinion

We have audited the financial statements of Constellium UK Limited (the 'Company') for the year ended 31 December 2021 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the Company's affairs as at 31 December 2021 and of its loss for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other matters

The financial statements of the company for the year-ended 31 December 2020 were audited by another auditor who expressed an unmodified opinion of those statements on 26 November 2021.

Other information

The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Directors has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit; or

-	the directors were not entitled to take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it operates. We determined that the following laws and regulations were most significant: FRS102 - the Financial Reporting Standard applicable in the UK & The Republic of Ireland, the Companies Act 2006 and relevant tax compliance regulations in the UK.

We obtained an understanding of how the Company is complying with those legal and regulatory frameworks by making enquiries of management.

We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, by meeting with management to understand where management considered there was susceptibility to fraud. Audit procedures performed by the audit team included:

- Challenging assumptions and judgements made by management in its significant accounting estimates;

- Identifying and testing journal entries, with a focus on entries made with unusual accounting combinations;

- Confirming with management whether they have knowledge of any actual, suspected or illegal fraud;

- Evaluating whether there was evidence of bias by management that represents a risk of material misstatement due to fraud.

These procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance will all laws and regulations.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Jacqueline Biggs FCCA ACA (Senior Statutory Auditor)

for and on behalf of Haines Watts, Statutory Auditor

Chartered Accountants

Advantage

87 Castle Street

Reading

Berkshire

RG1 7SN

27 September 2022

TURNOVER

3

4,341,471

4,180,118

Administrative expenses

5,962,768

4,853,922

(1,621,297

)

(673,804

)

Other operating income

4

1,209,806

492,796

OPERATING LOSS

6

(411,491

)

(181,008

)

Interest receivable and similar income

1,793

1,603

(409,698

)

(179,405

)

Interest payable and similar expenses

7

5,095

21,754

LOSS BEFORE TAXATION

(414,793

)

(201,159

)

Tax on loss

8

(316,886

)

(58,689

)

LOSS FOR THE FINANCIAL YEAR

(97,907

)

(142,470

)

LOSS FOR THE YEAR

(97,907

)

(142,470

)

OTHER COMPREHENSIVE INCOME

Actuarial gain/(loss) on post employment

82,410

424,000

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

82,410

424,000

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(15,497

)

281,530

FIXED ASSETS

Intangible assets

9

29,986

-

CURRENT ASSETS

Debtors

10

2,302,912

1,559,070

Cash in hand

117,948

117,009

2,420,860

1,676,079

CREDITORS

Amounts falling due within one year

11

1,484,516

607,572

NET CURRENT ASSETS

936,344

1,068,507

TOTAL ASSETS LESS CURRENT LIABILITIES

966,330

1,068,507

RETIREMENT HEALTHCARE BENEFITS OBLIGATIONS

15

(403,806

)

(559,992

)

NET ASSETS

562,524

508,515

CAPITAL AND RESERVES

Called up share capital

13

390,000

390,000

Retained earnings

14

172,524

118,515

SHAREHOLDERS' FUNDS

562,524

508,515

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 27 September 2022 and were signed on its behalf by:

M R Jarrett - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2020

1,290,000

(1,327,015

)

(37,015

)

Changes in equity

Increase in share capital

100,000

-

100,000

Reduction in share capital

(1,000,000

)

1,000,000

-

Total comprehensive income

-

281,530

281,530

Equity settled share based

payments

-

164,000

164,000

Balance at 31 December 2020

390,000

118,515

508,515

Changes in equity

Total comprehensive income

-

(15,497

)

(15,497

)

Equity settled share based

payments

-

69,506

69,506

Balance at 31 December 2021

390,000

172,524

562,524

1.	STATUTORY INFORMATION

Constellium UK Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going Concern

The Company's parent company has indicated that for at least twelve months from the date of approval of these financial statements it will continue to make available such funds as are needed by the Company to pay its liabilities as they fall due and in particular will not seek repayment of the amounts currently made available.

The directors consider that this should enable the Company to continue in operational existence for the foreseeable future by meeting its liabilities as they fall due for payment. As with any Company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of the approval of these financial statements, they have no reason to believe that it will not do so.

Based on the undertakings from the parent company the directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

FRS102 allows a qualifying entity certain disclosure exemptions, subject to certain conditions, which have been complied with, including notification of, and no objection to, the use of exemptions by the company's shareholders.

The company has taken advantage of the exemption, under FRS102 paragraph 1.12 (e) from disclosing key management personnel compensation, as required by FRS102 paragraph 33.7.

The company has taken advantage of the exemption under section 7 of FRS102 and paragraph 3.17 (d) from preparing the statement of cash flows.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Turnover

Turnover represents rechargeable costs excluding Value Added Tax in respect of hosting employees.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Software licences are being amortised evenly over their estimated useful life of three years.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Rental payable under operating leases, including any lease incentives received , are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.

Pension costs and other post-retirement benefits

Defined contribution schemes

The Company participates in a defined contribution scheme. Defined contribution schemes are externally funded, with the assets of the scheme held separately from those of the Company in separate trustee administered funds and contributions to such schemes are charges to the profit and loss account as they become payable.

Other post employment benefit schemes

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method.

The change in the post employment benefit obligation arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expenses in measuring profit or loss in the period in which they arise.

The net interest element is determined by multiplying the post employment benefit obligation by the discount rate, taking into account any changes in post employment benefit obligation during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

Remeasurement changes comprise of gains and losses on post employment benefit schemes, the effect of the asset ceiling and the return on the post employment benefit obligation excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The post employment benefit liability in the balance sheet comprises the total for each plan of the present value of the post employment benefit obligation (using a discount rate based on high quality corporate bonds).

Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Monte Carlo model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

3.

TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the Company.

An analysis of turnover by class of business is given below:

2021

2020

£

£

Recharged costs

4,341,471

4,180,118

4,341,471

4,180,118

4.	OTHER OPERATING INCOME

2021

2020

£

£

Sundry receipts

2,500

1,000

Government grants

1,207,306

491,796

1,209,806

492,796

Grants received from the UK Government are in respect of the development of lightweight aluminium solutions for use within the automotive industry.

5.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

3,232,498

2,646,445

Social security costs

428,557

330,380

Other pension costs

224,427

250,911

3,885,482

3,227,736

The average number of employees during the year was as follows:

2021

2020

Research & development

30

19

Management

7

8

Sales

3

4

Apprentice

5

5

45

36

2021

2020

£

£

Directors' remuneration

539,237

441,931

Directors' pension contributions to money purchase schemes

26,566

32,810

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

2

2

Information regarding the highest paid director is as follows:

2021

2020

£

£

Emoluments etc

275,152

221,000

Pension contributions to money purchase schemes

1,951

24,810

6.	OPERATING LOSS

The operating loss is stated after charging:

2021

2020

£

£

Other operating leases

86,732

26,507

Software licences amortisation

2,943

-

Foreign exchange differences

2,222

188,239

Share based payments

69,506

164,000

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

£

Interest payable

5,095

21,754

8.

TAXATION

Analysis of the tax credit

The tax credit on the loss for the year was as follows:

2021

2020

£

£

Current tax:

UK corporation tax

(316,886

)

(58,689

)

Tax on loss

(316,886

)

(58,689

)

Tax effects relating to effects of other comprehensive income

2021

Gross

Tax

Net

£

£

£

Actuarial gain/(loss) on post employment

82,410

-

82,410

2020

Gross

Tax

Net

£

£

£

Actuarial gain/(loss) on post employment

424,000

-

424,000

9.	INTANGIBLE FIXED ASSETS

Software

licences

£

COST

Additions

32,929

At 31 December 2021

32,929

AMORTISATION

Amortisation for year

2,943

At 31 December 2021

2,943

NET BOOK VALUE

At 31 December 2021

29,986

10.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2021

2020

£

£

Trade debtors

30,088

-

Amounts owed by group undertakings

877,897

987,155

Amounts owed by joint ventures

77,239

-

Other debtors

78,696

114,519

Tax

304,770

58,689

Prepayments and accrued income

934,222

398,707

2,302,912

1,559,070

11.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2021

2020

£

£

Trade creditors

15,751

17,252

Amounts owed to group undertakings

116,501

31,769

Social security and other taxes

112,053

71,089

Other creditors

105,521

27,503

Accruals and deferred income

1,134,690

459,959

1,484,516

607,572

12.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

2021

2020

£

£

Within one year

76,100

10,000

Between one and five years

71,759

10,000

147,859

20,000

13.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2021

2020

value:

£

£

290,000

Ordinary

1

290,000

290,000

100,000

Preference

1

100,000

100,000

390,000

390,000

The 3% redeemable non-voting non-cumulative preference shares are redeemable at the discretion of Constellium UK Limited.

14.

RESERVES

Retained

earnings

£

At 1 January 2021

118,515

Deficit for the year

(97,907

)

Actuarial gain/(loss) on post employment benefit schemes

82,410

Equity settled share based

payments

69,506

At 31 December 2021

172,524

15.	EMPLOYEE BENEFIT OBLIGATIONS

The Company has a constructive obligation to continue to make payments for health care insurance premiums for retired key personnel. No other post retirement benefits are provided.

The present value of the obligation has been calculated using the discounted cash flow model, based on life expectancy in the UK, age related insurance premium increases and inflation.

Key assumptions:

2021

2020

%

%

Discount rate

1.45

0.45

Inflationary increase in pension costs

2.2

0.8

Mortality assumptions

Assumed life expectations on retirement at age 65:

2021

2020

Years

Years

Retiring today

- Males

81.200

81.400

- Females

81.200

81.400

Included within administrative expenses is the release of £76,130 (2020 - £99,071) of the provision relating to premium paid in the year. Included in finance costs is £2,350 (2020 - £13,467) relating to the unwinding of the discount factor.

The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:

2021

2020

£

£

Retirement healthcare liability balance

403,806

559,992

Total liability recognised

403,806

559,992

The defined benefit obligations arise from plans which are wholly unfunded.

Defined contribution scheme

The Company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Company in an independently administered fund.

The pension cost charge represents contributions payable by the Company to the fund of £224,427 (2020 - £192,000).